J K A B C D E F G H 35 PROBLEM 3 36 Assume that you are the CFO at Porter Memorial Hospital. The CEO has asked you to analyze two proposed 37 capital investments - project X and project Y. Each project requires a net investment outlay of $25,000, 38 and the cost of capital for each project is 7.5 percent. The projects' expected net cash flows are as follows: 39 40 Year Project X Project Y X Cumulativ Y Cumulative Rate 41 0 $(25,000) $ (25,000) 42 1 $ 13,500S 7,250 43 2 $ 9,500 $ 7,250 44 3 $ 6,000 $ 7,250 45 4 $ 3,000 $ 7,250 46 47 a. Calculate each project's payback period, net present value (NPV), and the internal rate of return (IRR). 48 49 50 b. Which project is financially acceptable? Explain your answer. 51 52 53 54 55